US President Joe Biden speaks as he visits North Carolina Agricultural and Technical State University in Greensboro, North Carolina, US, April 14, 2022.
Leah Millis | Reuters
The Biden administration said it will resume selling leases to drill for oil and gas on federal lands starting next week, but with a major reduction in the number of acres offered and an increase in the royalties companies must pay to drill.
The Interior Department announced that on Monday it will release a sale notice for leases to drill on 144,000 acres of government land – 80 percent less than what was initially being evaluated for potential leasing.
President Joe Biden, who on the campaign trail called for an end to drilling on federal lands, has been looking for ways to temporarily increase U.S. energy production to help drive down the price of gas.
The move comes amid growing pressure for the Biden administration to do more to lower gas prices, with Republicans in particular saying it should allow more drilling.
Industry experts say it would take at least six months to a year before new drilling on federal land would produce additional supply and ultimately bring down the cost of gas, which has emerged as a major midterm election issue.
Friday’s announcement, however, is likely to rankle environmentalists. During the 2020 presidential campaign, Biden had urged a complete end to drilling for oil and gas on federal lands, but courts disagreed with his initial moratorium that he signed when he took office.
In late February, the administration said it was delaying decisions on new oil and gas drilling on federal land after a federal court blocked federal agencies from using an estimate known as the “social cost of carbon” to evaluate the damage done by carbon emissions stemming from energy production.
The Interior Department on Friday said the new leasing would come with a royalty rate of 18.75 percent, up from the previous 12.5 rate that critics complained was far lower than what energy companies pay to drill on most state lands.